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Written by Mark Ruttner on . Posted in Blog, Property Valuation

The Importance of Property Valuations in the Owners Corporation Process

Property valuations play a crucial role in the owners corporation (also known as a body corporate) process for several key reasons:

Property Valuations Melbourne

1. Determining Insurance Coverage

  • Owners corporations are legally required to insure common property and, in some cases, individual lots.
  • Regular property valuations ensure that the sum insured accurately reflects the current replacement cost.
  • Underinsurance can lead to financial shortfalls, while over insurance results in unnecessary premium costs.

2. Setting Owners Corporation Fees & Levies

  • Accurate valuations help determine fair levies for maintenance, repairs, and management costs.
  • Property values influence lot liability and entitlement, dictating how much each owner contributes.
  • Ensuring up-to-date valuations prevent disputes over fee calculations.

Setting Owners Corporation Fees & Levies

3. Budgeting for Maintenance & Capital Works

  • A proper valuation helps assess the future cost of major repairs or renovations for common property.
  • This informs the maintenance fund (sinking fund), ensuring sufficient reserves for upcoming expenses.

4. Managing Disputes & Legal Compliance

  • In case of disputes over levies, fees, or insurance claims, an independent valuation provides an objective basis for resolution.
  • Many jurisdictions legally require periodic valuations to maintain compliance with strata laws.

Independent Property Valuations Melbourne

5. Facilitating Property Sales & Refinancing

  • For owners looking to sell or refinance, accurate valuations help determine market value.
  • Lenders may require a recent valuation to assess mortgage risk for prospective buyers.

6. Equitable Special Levies Distribution

  • When unexpected expenses arise, valuations help allocate special levies fairly among owners.

In summary, property valuations are essential for maintaining financial stability, legal compliance, and a fair contribution within an owners corporation. Regular updates prevent financial shortfalls, disputes, and ensure that shared assets are adequately protected and maintained.

To discuss any related property matter herein or other issues, please contact
Mark Ruttner, Managing Director

mr@fvg.com.au 0411 419 674

First Valuation Group
Suite 110/181, St Kilda Road, St Kilda, Victoria, 3182
valuations@fvg.com.au